Officials from Saudi Arabia and China have been in constant communication regarding the possibility of pricing part of the Gulf nation’s oil sales in yuan rather than dollars or euros.
So What Happened?
According to The Wall Street Journal, which cited individuals familiar with the situation in a Tuesday story, the two countries had been having intermittent negotiations over yuan-priced oil contracts over a six-year period.
According to reports in the Wall Street Journal, the Saudis are dissatisfied with U.S. policy in the Middle East, particularly with the lack of support for Saudi involvement in the Yemen civil war and the Biden administration’s efforts to finalize a nuclear deal with Iran.
According to the report, Saudi authorities were taken aback by the way in which the United States withdrew its armed personnel from Afghanistan.
In short, United States war making in the middle east and in Africa isn’t brutal enough for the Saudis.
This is important because as part of a security agreement with the United States government, the Saudis have been obliged to utilize the dollar exclusively for oil transactions since the mid-1970s. Nearly 80% of the world’s oil is traded in US dollars.
According to the General Administration of Customs of China, the nation has formed a tighter commercial connection with Saudi Arabia in recent years, with the kingdom supplying 1.76 million barrels of oil per day to the country in 2021.
It is possible that even if Saudi Arabia continues to use the dollar to conduct the bulk of its oil trade, the decision to allow for the price of its oil in the yuan would have an influence on the policies of China’s other major oil suppliers such Russia, Angola, and Iraq. In short, this could produce a cascade effect that bleeds into other countries.
It would seem that US supremacy around the world may be coming to end, and many argue that the petrodollar oil trade is basically the only thing that gives US fiat money any real value, considering it is basically just printed out of thin air.
As the US loses more control over the world in the coming years, we can expect our government to act more irrationally, desperate, and even more violent. It would seem that for Americans, trading in your fiat currency for precious metals like Silver may be a good idea, sooner rather than later.
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